DOE: 3rd round of FiT unlikely

The Department of Energy (DOE) is not keen to offer a third round of the Feed-in-Tariff Allowance (FiT-All) for renewable energy suppliers, saying the tariff is burden for ordinary Filipino consumers, DOE Secretary Alfonso G. Cusi said in an interview on Thursday.

The FIT-All is a uniform charge billed to all on-grid electricity consumers who are supplied with electricity sourced from qualified renewable energy generators.

“Right now I said . . . it’s too much because FiT runs up to 20 years and it’s overburdening our consumers. We want to bring down our electricity rates. How can we bring it down if we keep on giving FiT?” Cusi said.

The FiT system is one of the policy mechanisms being implemented by the DOE to encourage the development of the renewable energy (RE) industry, in line with the agency’s aims to maintain a 30 percent share of clean energy in the country’s power mix.

In July, the National Renewable Energy Board (NREB) proposed new FiT rates that would provide for a third round of installations of wind and solar farm developments.

According to NREB, the proposed third round of FiT rate for solar would be P7.66 per kilowatt-hour (kWh), down from the recent P8.69 per kWh.

The targeted additional generation capacity for solar technology will be 500 megawatts (MW), but that will include the excess of 390 MW from the second wave race of development.

For wind power projects, the proposed next FIT rate would be P6.97 per kWh, also reduced from the most recent FIT charge of P7.40 per kWh. It will also cover additional 500 MW of installations.

“The original target was 50 MW then it was raised to 500 MW,” Cusi said, “But In any race, there’s a winner [and]there’s a loser. What do we do? They can’t all be winners so those who are qualified will get the FiT.”
For the 500 MW endorsed by Energy Regulatory Commission (ERC), Cusi said, “We’re not saying we won’t process it. In fact, I wrote that it has to be evaluated based on the rules they were given. We never changed those rules.”

Concerning the 390 MW capacity built in excess of the 500 MW qualified for the previous round of FiT, “You know the rules when you participated. If you don’t qualify, you should know your options. If you don’t qualify then you should know your options and your options are either the spot market or the bilateral contract,” Cusi said, referring to the project developers.

“I’m not against solar nor am I against providing incentives to developers, but through different means or options,” Cusi explained.

The energy chief did not give definite answer when asked if a third round of FiT was definitely out of the question, but he said at this point, other options are available, specifically the Wholesale Electricity Spot Market (WESM) and bilateral contracts between power producers and distributors.

Cusi earlier said that in the RE law there is no provision that it should be the burden of consumers to pay the FiT allowance, and “until we find new source of funding we will not issue any FiT.”

“We are trying to look for another source. We also bringing [the matter]up to the Climate Change Commission to identify other sources that we can charge the FiT,” he said.

“But not for our people to be burdened for this, motivating [the Climate Change Commission]to do something or try something. Why we have to suffer? It is okay if our people can carry this other cost but here we are, struggling, we are complaining about our electricity rates,” Cusi said.